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Is Binance using the Bitcoin Lightning Network? No new channels for 30 days

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Is Binance Using The Bitcoin Lightning Network? No New Channels For 30 Days

Binance is the biggest crypto exchange in the world, with the highest trading volume for Bitcoin (BTC), the leading cryptocurrency. The company confirmed the Bitcoin Lightning Network implementation on June 20, but after two months, Binance’s activities regarding Bitcoin’s second layer are still far away from its competitors.

The Lightning Network (LN) is a Layer-2 solution for scaling Bitcoin transactions, in which two peers open a bilateral channel by depositing BTC in a joint wallet (known as a multi-sig wallet), that can be later redeemed to the Bitcoin’s first layer with both users’ balances updated according to all the transactions they did using this channel — that were confirmed faster and with less network fees.

Notably, Binance’s first Lightning Network channel was opened 62 days ago (June 16), according to data retrieved by Finbold from Amboss Space on August 16. But the most recent channel, out of six channels, already existed for 30 days — showing that no new LN channels have been created ever since.

Binance Node On The Bitcoin Lightning Network.
Binance Node on the Bitcoin Lightning Network. Source: Amboss

The total capacity available for the Binance Node of 34 BTC (3.4 billion sats) is also the same since, at least, July 24. The capacity measures the amount of Bitcoin that has been deposited to each of their six channels, available to be used during users’ deposits and withdrawals.

Binance competitors on the Lightning Network: Bitfinex and Kraken

As for comparison, the crypto exchange leading the use of the Lightning Network is Bitfinex, owning two Bitcoin LN nodes called ‘bfx-lnd0’ and ‘bfx-lnd1’. Which, by press time, have more than 404 BTC capacity among 929 channels, and 480 BTC capacity among 915 channels, respectively.

Bitfinex Nodes on the Bitcoin Lightning Network. Source: Amboss

The youngest channel created by ‘bfx-lnd0’ is six hours old, and the most recent channel for ‘bfx-ln1’ was created one hour before writing time.

Something similar can be seen in the second crypto exchange on Lightning Network usage: Kraken. Having one single node with more than 324 BTC capacity among 1,509 channels — with the youngest channel created two hours ago, from press time.

Kraken Node On The Bitcoin Lightning Network. Source: AmbossKraken Node on the Bitcoin Lightning Network. Source: Amboss

Is Binance using the Bitcoin Lightning Network?

Binance is the leading exchange by Bitcoin volume in the market, registering a sum of over $837 million exchanged in both BTC/USDT and BTC/TUSD pairs in the last 24 hours. Kraken has less than $40 million, and Bitfinex with less than $25 million in the same period for both BTC/USD pairs.

Btc Markets By FinboldBTC Markets. Source: Finbold

All things considered, even if Binance has been using Bitcoin’s second layer, its usage is definitely at lower levels than expected by Lightning Network enthusiasts who were, for so long, asking for the implementation so they could deposit and withdraw BTC values more efficiently in the leading crypto exchange.

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